In
Maryland, the state foster care agency has hired a company called MAXIMUS, Inc. to find children whose parents
are deceased and to increase the number of children who are determined to be disabled.
This is not to provide them with more help, but to enable the state to take their
disability and survivor benefits. In a prior contract to lay the groundwork for
this effort, MAXIMUS described foster children as a “revenue generating mechanism.”
Not only does MAXIMUS help Maryland to obtain disability and survivor benefits
from foster children, the company now runs the entire Baltimore child support
office.

Some US states
take even more from foster children, including confiscating Veteran’s
Assistance benefits from kids whose parents have died in the military. Nebraska
will even take a foster child’s burial plot away from them if they have one. These practices just scratch the
surface of what is taking place across the USA today, where state governments
are partnering with private companies to form a vast poverty industry that turns America’s
most vulnerable populations into a source of profit.

Why is
this happening?

First, human
service agencies desperately need more funding and states are strapped for cash.
Both ‘red’ and ‘blue’ states have faced poor economic
conditions and a political climate that’s been averse
to raising sufficient revenue through general taxation. So states are looking
for money wherever they can find it, even if that means taking funds from
children and the poor.

For example, states are using hospitals and nursing homes in
Medicaid ‘shell games’ by maximizing revenue that’s intended to serve the
elderly and the poor and then diverting the funds to their general budgets. Texas
has used these schemes to re-route
$1.7 billion in Medicaid funds to state coffers over a five-year period. Although
states and the federal government are supposed to share the cost of providing
Medicaid services, Texas contributes no money at all in these schemes.
Instead it forces hospitals
and nursing homes to provide the state’s contribution, and then takes the federal
contribution for its
general fund. This
diversion of funds “discourages state hospitals from
treating the poorest Texans.”

Second, partnerships
between states and private contractors prioritize the aim of maximizing revenue
over maximizing the public good. The strategies of the poverty industry skew human
service agencies away from their social mission.

For
example, some states and counties partner with companies to turn courts into
debtor’s
prisons—focusing on revenue rather than justice. Impoverished defendants are
saddled with unmanageable court fines, and then the courts hire private
collection agencies to pursue them, along with probation companies and firms
that manufacture electronic monitoring devices which add
on yet more fees. If
the poor can’t pay, they go to jail. An Alabama
judge told poor litigants that they must sell their blood in order to pay their
court fines or face time behind bars. Poor debtors in Mississippi have been forced
into penal farms to work off court fines at a rate of $58 a day.

In
addition, nursing homes and juvenile facilities sedate their residents with
psychotropic medications in order to reduce staffing costs and increase their profits—while
pharmaceutical companies
have faced charges for encouraging such behavior through illegal marketing. Johnson
& Johnson agreed to pay $2.2 billion to resolve claims that the company promoted
an antipsychotic drug for off-label uses, including allegations that that the
company’s subsidiary “marketed Risperdal to control the
behaviors and conduct of the nation’s most vulnerable patients: elderly
nursing home residents, children and individuals with mental disabilities.”

What
can be done to challenge and eventually reverse these trends?

First,
awareness matters. Both Democratic and Republican state governors have been
able to use children and the poor as revenue tools because their constituents
have been kept in the dark about what’s going on, so public pressure for reform
and accountability has been weak. With increased understanding of these revenue
strategies, states can be held accountable if they misuse funds.

Second,
mission matters. Rather than using the vulnerable to serve its own fiscal
self-interests, the poverty industry should use its collective energy and
resources to determine how best to support those who really are in need.

‘Vulnerable’ does not imply weakness. I’m in awe of the strength and
determination that’s shown by low-income families who are struggling to
overcome the barriers that stand in the way of their economic security. To
quote Professor Martha
Albertson Fineman from Emory University, “[v]ulnerability
is the characteristic that positions us in relation to each other as human
beings and also
suggests a relationship of responsibility between the state and its
institutions and the individual.”

We are
all vulnerable, and like it or not, we are all interdependent—both
with each other and with the
institutions that are designed to help us. At various times, some of us face more
discrimination, trauma and disadvantage than others. When the poverty industry
places the mission of maximizing revenue over serving those in need, the
vulnerable are harmed. And when the vulnerable are harmed, so are we all.

When
the Maryland foster care agency hires a contractor to help the state take resources
away from abused and neglected children, the public’s belief in government’s commitment to the common good
is harmed by an egregious breach of trust and moral integrity. And the public
is also harmed financially. When agencies take resources from foster children they
are less likely to become self-sufficient after leaving care and more likely to
need public assistance, more likely to be unemployed, and more likely to become
incarcerated. When the state harms the vulnerable, the public pays the price.

It’s
clear that a fundamental realignment of purpose is required. The poverty
industry combines the vast powers of government with the profit seeking
appetites of private enterprise. This collaboration has the capacity to do some
good if partnerships are properly constructed and regulated closely, but only
if public entities lead the way. State governors and directors of human service
agencies control all contracts with private companies, so rather than using them
to take resources away from foster children they could encourage contractors to
help children obtain their disability and survivor benefits in order to
conserve the children’s funds in planning for their future transition out of
foster care.

To be
clear, I’m not arguing that government aid programs should be cut. On the
contrary, current levels of public assistance are significantly insufficient to
meet current needs. If states are misusing resources, then the appropriate
response is not to cut the funding but to stop the misuse. People may disagree
about the best way to structure programs that are designed to support
vulnerable populations, but we all should be able to agree that funds that are generated
with the specific intent of helping those in need should be used as intended.

The
temptation for underfunded agencies to prioritize their own fiscal interests is
very strong. But when states take funds away from the poor, the prime purpose
of government in serving the public good is eroded. As a former foster child named
Ryan expressed in a court hearing when questioning why the Baltimore City foster
care agency could take away the survivor benefits that were left to him by his deceased
father, “You know, the thing is, they are
survivor benefits. I am a survivor.”